Alabama A&M hit with 14 'findings' of possible financial wrongdoing

State auditors issued 14 findings against Alabama A&M University involving the school's financial business, including instances of not following state law and taking money out of a foundation trust to use in the school's general fund budget.

A university administrator also reimbursed the school more than $6,000 he received in moving expenses that could not be documented, according to a report from the Alabama Department of Examiners of Public Accounts.

AL.com on Wednesday obtained a copy of the report, which is dated March 13.

The report - which spans fiscal years from 2008 to 2013 - stated that in six of the findings, the school may not have followed state law. Also, four prior findings - dating from 2005 to 2008 - were unresolved, according to the report.

The school provided a written response to AL.com for each of the 14 findings. Alabama A&M disagreed with three of the 14 findings in that response. The school did not object to any of the six findings regarding a possible failure to follow state law.

Alabama A&M President Andrew Hugine, in a statement released to AL.com, said the report reflects that no one benefited financially in the findings. Hugine also said the school was "disappointed in the amount of speculation" in the report.

"I, along with others in my administration, will continue to strengthen our financial controls and be transparent about the challenges we continue to face," Hugine said.

Among the findings in the report:

Kevin Rolle, who came to Alabama A&M within weeks of Hugine's hiring in 2009, reimbursed the school $6,534.55 in moving expenses on Jan. 30, according to the report. Rolle, Hugine's chief of staff, produced an invoice to examiners that the moving company could not verify, the report said. Examiners also said the moving company did not have Rolle's name in their database.

The school did not dispute the Rolle finding.

The school did not re-invest income into the Alabama A&M University Trust for Educational Excellence as required by federal law in 2012 and 2013. The report said in 2012, more than $1.3 million in income and $2.6 million of the trust's balance was transferred to the university.

In 2013, financial statements indicated none of the more than $4 million in income was re-invested in the trust. According to the federal court order in the Knight-Sims lawsuit, Alabama A&M must reinvest 25 percent of its income in the trust.

The school said it did not agree with the "core facts" in the finding and that the "presentation of the finding is misleading."

"There is a legal question as to the continuing applicability for the Knight-Sims order," the school said in its response. "The university is currently investigating this further."

The school placed $23,000 in its foundation that should not have been classified as a donation. After this was brought to Hugine's attention, according to the report, the $23,000 was refunded to the school in January.

The school outlined in detail why it placed the money in the foundation, maintaining the issue is not about procedure but rather defining what is a "contribution" for fundraising purposes.

"The conclusion is not based on the norm for reporting in the fundraising industry nor the convention of counting employed at the other universities which we contacted," Alabama A&M said in its response.

"Nonetheless, the contributions have been returned from the Foundation to the University. It should also be noted that the entire amount was directed to the Foundation from the very beginning. In conclusion, the University strenuously disagrees with the finding."

The same finding said incentives and benefits Hugine qualified for under the terms of his contract were not included in gross income on Hugine's W-2 tax form that outlines wages and salary information in 2012 and 2013. As a result, the finding states Alabama A&M may not have complied with IRS guidelines by not including all payments to Hugine.

Incentives and benefits not included in the W-2, according to the report, were a $3,000 monthly housing allowance, an $800 monthly car allowance (later increased to $1,000 per month) and $34,500 in incentives.

The school did not address the issue of the W-2 form in its response.

See below for the full report from the Department of Examiners of Public Accounts as well as Alabama A&M's response to the report.